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The Most-Bought Stocks of Investing Gurus

Posted
5/21/2013 5:24:00 PM
By: GuruFocus
Referenced Stocks:AAPL;C;JPM;MSFT;ORCL

Last week, gurus finished reporting their portfolio updates for the first quarter, and buying activity was more concentrated among certain stocks than others. GuruFocus' S&P 500 Screener demonstrates that the companies the most money managers GuruFocus follows bought or increased their shareholdings of are: Apple ( AAPL ), Microsoft ( MSFT ), Citigroup ( C ), JPMorgan ( JPM ) and Oracle ( ORCL ).

S&P 500 Screener Shot:



Oracle ( ORCL )

Oracle was purchased by two money managers GuruFocus follows in the first quarter, making it the fifth-most purchased of the S&P 500. The stock in the first quarter traded between $31.25 and $36.34. On Monday it is priced at $34.90 after gaining 4.7% year to date.

Jeremy Grantham , with 47,057,601 shares, has the largest stake, as Lou Simpson , with 5,019,659 shares, has the stock as the greatest percentage of his portfolio, at 10.2%.

A company with a $160.4 billion market cap, Oracle provides optimized and integrated hardware and software systems to its clients which include all of the Fortune 100.

Oracle in the first quarter saw a 1% decline in revenues to $8.96 billion on a U.S. currency basis, and net income was almost flat at $2.5 billion or 28% of revenues. Cash and cash equivalents also increased to $16.1 billion from $14.96 billion, and current liabilities declined to $11.9 billion from $15.34 billion.

Oracle in February merged with session border control technology company Acme Packet Inc. and acquired cloud marketing and revenue management software company Eloqua Inc. for $935 million.

JPMorgan ( JPM )

Twenty-three gurus purchased or added to their holdings of JPMorgan stock in the first quarter, ranking it as the fourth most-purchased stock of the S&P 500. JPMorgan's third quarter share price spanned $43.96 and $51, and touches a near 10-year high $52.59 per share on Tuesday.

Investor James Barrow has the largest stake in JPMorgan with almost 31 million shares, or 0.8% of the company. Mark Hillman owns 35,236 shares which is the largest percentage of a guru's portfolio at 5.1% of his assets managed.

In the first quarter JPMorgan reported net income of $6.5 billion, an increase from $4.9 billion in the year-ago quarter, on $25.8 billion in revenue, declined slightly from $26.8 million in the year-ago quarter. Nevertheless, the firm's capital strength and earnings power allowed it to increase its dividend to $0.38 per share from $0.30 per share, matching its highest historical level.

JPMorgan has a P/E of 9.3, a P/S ratio of 2.08 (near a three-year high) and P/B ratio of 1.0.

Citigroup ( C )

Twenty-three gurus also purchased Citigroup, tying it with fellow financial services company JPMorgan. The company traded within $39.56 and $47.60 in the first quarter, and at $51.60 on Tuesday.

James Barrow owns the most shares with just over 20 million, and Mohnish Pabrai has the most significant investment, with about 1.6 million shares measuring 20.3% of his assets managed.

Citigroup in the first quarter reported net income of $3.8 billion, up from $2.9 billion in the year-ago quarter, after 2012 marked its third straight year of profitability since the financial crisis. Revenue of $20.5 billion was up from $19.4 billion in the year-ago quarter. The bank promised a "challenging" year but said factors contributing to positive results included: seasonally strong markets businesses, sustained investment banking momentum, year-over-year loan and deposits growth and a more favorable credit environment.

In March, Citi agreed to pay $730 million to settle a class action lawsuit related to Citigroup debt and preferred stock purchased from 2006 to 2008, placing it closer to resolving its claims from the financial crisis period.

Citi's dividend remains $0.01 per share, but the company approved a $1.2 billion common stock repurchase program ending in first quarter 2013, in an aim to offset share dilution due to its annual incentive compensation grants.

Citigroup has a P/E of 19.2, P/B of 0.80 and P/S of 2.18, near a five-year high.

Microsoft ( MSFT )

Thirty-one gurus purchased second-place stock Microsoft in the first quarter. Its price ranged from $26.46 to $28.61 in the first quarter, and hit $35.08 on Tuesday, near its 10-year high.

The firm Dodge & Cox possesses the most shares, with more than 78 million, and Donald Yacktman has the largest weighting in the company, with 6.1% of his total assets managed invested in it.

In the first quarter Microsoft had revenue of $20.49 billion, an increase from $17.4 billion in the year-ago quarter though down slightly sequentially. Revenue increases were primarily a result of new products and services such as the Windows 8, Surface Pro and the new Office, and hampered by a decline in the x86 PC market. Net income also increased to $6.1 billion, an increase from $5.1 billion in the year-ago quarter.

Microsoft has a P/E of 17.8, P/B of 4.4 and P/S near a three-year high at 3.89.

Apple ( AAPL )

Apple ranked as the most-purchased stock in the first quarter. Shares of the company were purchased by 37 investors gurus tracked by GuruFocus. The purchase price ranged between $420.05 and $549.03. On Tuesday, the price stands at $442.93, near a 52-week low.

Hedge fund manager David Einhorn controls the most shares with about 2.4 million, which also qualifies him as the investor with the most dominant position, at 16.2% of his total assets under management.

In the first quarter Apple posted $43.6 billion in revenue, compared to $39.2 billion in the year-ago quarter, and $9.5 billion in net profit, compared to $11.6 billion in the year-ago quarter. Revenue growth was driven by strong iPhone and iPad sales. The company ended the quarter with $145 billion in cash on its balance sheet.

In April, Apple also decided to more than double its return of capital to shareholders to $100 billion by the end of calendar year 2015, or about $30 billion per year. The program includes increasing its repurchase authorization from $10 billion to a record $60 billion, and spending roughly $1 billion annually on net-share-settle vesting restricted stock units, as well as a 15% dividend increase to $3.05 per share.

Apple has a P/E of 10.3, near its 10-year low, a P/B of 3.3 and P/S of 2.43, near its five-year low.

To see more of the stocks the most gurus bought in the first quarter of 2013, visit the S&P 500 screener. Become a Premium Member to GuruFocus here.About GuruFocus: GuruFocus.com tracks the stocks picks and portfolio holdings of the world's best investors. This value investing site offers stock screeners and valuation tools. And publishes daily articles tracking the latest moves of the world's best investors. GuruFocus also provides promising stock ideas in 3 monthly newsletters sent to Premium Members .